I did not read the previous 39 pages (too much time) but here's my input on this. If anybody cares to even read it because I'm sure it'll be very long.
PD was a pioneer when it came out with the first GT game. There really wasn't anything like it at that caliber. I mean, real cars and real tracks to race them on with customizations to the car. They reign as kings for many years to come with the release of GT2, then GT3 with absolutely amazing graphics for the PS2. When GT4 came out, they kind of dropped the ball when they didn't improve on any of the faults that were in the previous games and just added more cars and tracks.
Forza Motorsports 1 came out and it offered something new to the genre. Not only could you do engine/drivetrain/suspension modifications but they also added exterior modifications to the cars, car classification, damage and the most important which was online support which added a whole new level of fun and challenges to the game. In my opinion, this was the point where Turn 10 was on par with PD as king of the racing game genre. Forza 1 wasn't a very good game but it was good enough to dethrone GT4 in terms of better physics (though it was still weak) and AI, online playability, a lot more customization content and you just can't beat the ability to swap an RB26DETT into an S14 Silvia.
Graphics, car modeling and animation(PD is still King at this) wise, Forza 1 was horrible compared to GT4 and it was running on a more powerful system. The sounds were a little bit better in Forza 1 but still nothing to jump for joy over. Forza 1 running at only 30 fps compared to GT4's 60fps were also a big disappointment and the amounts of cars and tracks were also puny compared to what GT4 was offering. So, it's a draw between GT4 and Forza 1 when you look at the pros and cons of both games. This is just my personal opinion so if you disagree, feel free to comment.
That was pretty much all last generation so let's move onto this generation. Turn 10 has definately taken over as King of the genre with the recent release of Forza 2. Better physics, better AI, even more ways to customize your cars including even more engine and drivetrain swaps. The game is also running at a smooth 60fps and the damage physics is as good as you can get with licensed production cars. You will not see a wheel fall off or an engine blow up and the car catching on fire because the game is using licensed production cars! The manufacturers of these cars would never allow their cars to be portrayed that way in a game.
If and when a GT game comes out that will feature damage, it will also be limited to what Forza 2 was limited to because it will also be featuring licensed production cars. This may be the reason why Kazunori hasn't implemented damage into any GT racing games. He's a perfectionist and if he is to do something, it has to be 100% or not at all. This may also be the reason why he said that there will be damage on race cars only because race cars does not follow the same licensing rules and regulations as production cars.
PD has the ability to overtake Turn10 very easily if they wish to do so. They've had a lot more experience at this than Turn10 have but they must really take a look at their competitor and what they're offering. They also have to take a look at this forum and see what their fan base are asking for (within reason, of course). Turn 10 did this with Forza 2 and a lot of their fans are happy with "a few" of the improvements they did with their 2nd installment. A few improvements is still better than nothing, in my opinion.
I'm hoping that PD is doing what Turn10 did by taking into account what their fans are wanting in this 5th installment. Also looking at what the competitors are offering and build their next game to set the bar even higher. So far, we know next to nothing about GT5 and what we do know and can see with our eyes, it's already better than what Forza 2 is offering. That is 16 cars on the track at the same time, amazing graphics and if the sounds they were using for the trailers are in game then that's another plus for PD. If they want to beat Turn10 in car selection then they will have to add Porsche, Maserati and Lamborghini into the game and get rid of all the 60hp cars.
I'm also hoping that Kazunori is looking at the Logitech G25 steering wheel and will say to himself, "self, we really need to implement a clutch pedal into the game that would make full use of that steering wheel." If they want to call their game a "real driving simulator" then this would fit perfectly into the game. Like I said, PD has the ability to take back their throne easily but they'll have to really do their homework on this one.
Summary of all the jibberish....
GT1,2,3 = PD was King!
GT4 + Forza 2 = PD and Turn 10 are both sharing the throne.
Forza 2 = Turn 10 is now King.
GT5 = Don't know, depends on how the game will be but results could be another shared throne, Turn 10 remains King or PD kicking Turn10's butt out of the castle and reclaim the throne.
for the most part, you're right. I guess it just dissapointed me a lot, it was soo close to perfection.
But... right now I, and many others, are sick and tired of GT4 and need something else while PD take their time with the next one... So Forza basically wins for me because it here, now. It's breaking consoles and I knew it, but I still bought it cause I need something fresh to play. 
